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Seller-Financed Mortgages

If you are holding a mortgage on property that the buyer is using as a personal residence, you must list the amount of interest received from the buyer as your first interest item on the lines provided for details under Line 1 of Schedule B.

Also include the buyer's name, Social Security number and address. If you don't, you can get socked with a $50 fine.

Tip

Beginning in 2013, a new 3.8 percent net investment income tax may be imposed on individuals whose modified adjusted gross income exceeds $250,000 for joint filers, $125,000 for married taxpayers filing separately, and $200,000 for others. Trusts and estates with income over a certain amount are also subject to the NII tax. Form 8960, Net Investment Income Tax� Individuals, Estates, and Trusts is attached to the tax return. For 2013, the IRS has provided taxpayers the ability to rely on more than one set of net investment income tax rules. The best choice varies by taxpayers and depends on the taxpayer's unique situation. Consult your advisor to determine which approach would be best for you.


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